April 17, 2014 Updated: April 17, 2014 at 5:50 pm
Venture capital investments bypassed the Colorado Springs area in the first quarter for the fourth consecutive quarter, even as such funding surged both statewide and across the nation compared with the same period a year earlier.
No local startup has landed venture funding since Colorado Springs-based computer storage manufacturer XIO secured $2 million in the first quarter of 2013 from a Connecticut venture capital fund that owns a majority of the company. That deal and Cherwell Software's $25 million investment in the final quarter of 2012 have been the only venture capital funding received by local companies in the past four years, a dearth that has prompted calls for a local fund to invest in Springs area startups.
Elsewhere in the state, venture investments totaled $112.6 million in the first quarter, up 13.1 percent from the fourth quarter of 2013 and a 63.6 percent jump from the first quarter of 2013, according to the MoneyTree Report from the accounting firm PricewaterhouseCoopers LLP and the National Venture Capital Association.
Much of the first-quarter surge came from a $50.7 million investment in Greenwood Village-based Cool Planet Energy Systems Inc. by 10 funds, led by a fund affiliated with oil giant ConocoPhillips.
"We are seeing more investments in software and in companies that are in their expansion stages that are starting to get traction in their markets," said Keith Parsons, who heads PricewaterhouseCoopers' Denver-based technology practice in Colorado and Utah. "We also are seeing more initial public offerings and acquisitions of venture-funded companies so far this year, which is a good sign that this trend of venture investing will continue during the rest of the year."
Nationwide, venture investments in the first quarter were up 12.2 percent from the previous quarter to $9.47 billion, the highest quarterly total since the second quarter of 2001 and a 57.4 percent jump from the first quarter of 2013. Venture investments have increased from the previous quarter for four consecutive quarters.
Much of the gain during the first quarter came from investments in software companies, which account for 42 percent of the overall amount invested and hit the highest point since the final quarter of 2000.
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